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UAE's Aldar to shift focus to mid-range properties
Abu Dhabi's state-controlled Aldar Properties said on Monday it would rethink future projects as an oil-fuelled property boom slows and would place new emphasis on mid-range properties.
The biggest developer in the United Arab Emirates capital will go ahead with most projects it has already committed to but would shift its focus away from high-end housing for projects still on the drawing board, Sami Asad, chief operating officer, said.
"Most of our projects are going ahead but on other projects we are rethinking whether this serves today's market or not," Asad said at a construction conference organised by MEED.
"We see some change in supply and demand and we still see demand in Abu Dhabi for mid-class housing. This is one of the opportunities we are looking at in the market."
The UAE property sector is going through a sharp price correction that was triggered in the autumn by the global financial crisis, which has dried up credit markets and made banks cautious about extending new mortgage loans.
Research firm Proleads said last week some $582 billion worth of construction projects had been put on hold in the UAE as the government and private investors contend with a global crisis that brought to an end a regional economic boom.
Most selling pressure has focused on properties in the emirate of Dubai, where average residential real estate prices have fallen by at least a quarter, according to some analysts.
Even in Abu Dhabi, where Aldar is leading the government's drive to develop new residential and leisure districts, house prices have fallen an average of 20 percent since a peak last summer, Morgan Stanley said this month.
Aldar's fourth-quarter profit tumbled 85 percent due to lower sales in poor market conditions.
The UAE capital, which holds more than 90 percent of the UAE's oil reserves, allows foreigners to invest in properties at some developments on a long term-lease basis. (Reuters)
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Posted by OSSAMA, AD, UAE on 9 February 2009 at 21:36 UAE time
Now all developers are rethinking to adjust plans to meet the demand of middle class, it is too late, now you are thinking about the middle class after the market collapsed.
Now you are thinking about the middle class after the rent went up almost 400% compared to 2004 rent, with my respect, you and other developers screwed themselves up.
My dear, it is too late the game is over